TaxTMI 
TaxTMI 
TaxTMI 
2022 (2) TMI 1090
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....knocked down the levy of penalty on this very ground. 3. The Ld. CIT(A) was not justified in sustaining the levy of penalty on wholly erroneous and insufficient grounds, without appreciating the assessee's detailed explanation and arguments advanced on each of the additions subjected to penalty, in correct perspective. 4. That the impugned order is against law and facts of the case and hence not sustainable." 2. Shorn of unnecessary details, the assessee firm had filed its return of income for A.Y 2001-02 on 31.10.2001, declaring an income of Rs. 1,62,910/-. Original assessment was framed by the A.O vide his order passed u/s 143(3) of the Act, dated 19.02.2004 and the income of the assessee firm was determined at Rs. 18,26,350/-. The A.O while culminating the assessment initiated penalty proceedings u/s 271(1)(c) of the Act. Also, a 'Show Cause' notice ("SCN") u/s. 274 r.w.s 271 of the Act, dated 19.02.2004 was issued to the assessee. 3. After culmination of the assessment proceedings, the A.O imposed penalty u/s 271(1)(c) of Rs. 6,00,284/- for furnishing of inaccurate particulars of income by the assessee firm qua the additions/disallowance that were made while framing th....
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.... of the Act. 6. Per contra, the ld. Departmental Representative (for short 'D.R') relied upon the orders of the lower authorities. 7. We have heard the ld. authorized representatives for both the parties, perused the orders of the lower authorities and the material available on record, as well as considered the judicial pronouncements that have been pressed into service by the ld. A.R in support of his aforesaid contention. Admittedly, on a perusal of the 'SCN', dated 19.02.2004, it stands revealed that the A.O had failed to strike-off the irrelevant default while calling upon the assessee to explain as to why penalty u/s 271(1)(c) of the Act may not be imposed on it. Apart from that, we find that the A.O had while culminating the assessment initiated the penalty proceedings in the body of the assessment order by stating as under : "Hence, the assessee has concealed or furnished inaccurate particulars of his income for which penalty proceedings under section 271(1)(c) of the Income-tax Act, 1961 have been initiated." In the backdrop of the aforesaid facts, we concur with the ld. A.R, that the A.O had both in the body of the assessment order, as well as vide his "SCN", dated 1....
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....Cause' notice, dated 19.02.2014, and the jurisdiction emerging there from in the backdrop of the judicial pronouncements on the issue under consideration. Admittedly, the A.O is vested with the powers to levy penalty under Sec. 271(1)(c) of the Act, if in the course of the proceedings he is satisfied that the assessee had either 'concealed his income' or 'furnished inaccurate particulars of his income'. In our considered view, as penalty proceedings are in the nature of quasi criminal proceedings, therefore, the assessee as a matter of a statutory right is supposed to know the exact charge for which he is being called upon to explain that as to why the same may not be imposed on him. The non-specifying of the charge in the 'Show cause' notice, in our considered view, not only reflects the non-application of mind by the A.O, but in fact defeats the very purpose of giving a reasonable opportunity of being heard to the assessee as envisaged under Sec. 274(1) of the Act. We find that the fine distinction between the two defaults contemplated in Sec. 271(1)(c), viz. 'concealment of income' and 'furnishing of inaccurate particulars of income' had been appreciated at length by the Hon'ble....
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....erald Meadows (73 taxmann.com 241)(Kar) following its earlier order in the case of CIT Vs. Manjunatha Cotton and Ginning Factory (2013) 359 ITR 565 (Kar), had held, that where the notice issued by the A.O under Sec. 274 r.w Sec. 271(1)(c) does not specify the limb of Sec. 271(1)(c) for which the penalty proceedings were initiated, i.e., whether for 'concealment of particulars of income' or 'furnishing of inaccurate particulars', the same has to be held as bad in law. The 'Special Leave Petition' (for short 'SLP') filed by the revenue against the aforesaid order of the Hon'ble High Court of Karnataka had thereafter been dismissed by the Hon'ble Supreme Court in CIT Vs. SSA's Emerald Meadows (2016) 73 taxmann.com 248 (SC). Apart from that, we find that a similar view had been taken by the Hon'ble High Court of Bombay in the case of CIT Vs. Samson Perinchery (ITA No. 1154 of 2014; Dt. 05.01.2017)(Bom). 11. We find that as averred by the Ld. A.R, the indispensable obligation on the part of the A.O to clearly put the assessee to notice about the specific charge under the aforesaid statutory provision, viz. Sec. 271(1)(c), had been deliberated upon at length by a 'Third member' decision....